Local Taxes Going Up

Wednesday

In a 6-to-1 vote held Monday evening in the Municipal Building's Courtroom, members of the Oak Ridge City Council approved a two-cent tax rate hike per $100 of assessed property.

OAK RIDGE, Tenn. — In a 6-to-1 vote held Monday evening in the Municipal Building’s Courtroom, members of the Oak Ridge City Council approved a two-cent tax rate hike per $100 of assessed property.

The rate will rise to $2.56 as opposed to its current $2.54.

Monday’s final vote on the rate increase was related to the city of Oak Ridge's budget for Fiscal Year 2020, which also was passed by Oak Ridge City Council as part of the same vote.

Mayor Pro Tem Rick Chinn cast the only vote against the budget and the rate hike. At a previous meeting, Chinn made several failed attempts to amend the FY2020 budget to avoid the proposed tax rate hike.

While on second reading he proposed no additional amendments, Chinn said he still believes the city could’ve avoided the rate increase.

“I still think there's a way to get there,” he said.

When Oak Ridge City Manager Mark Watson originally presented his budget to Council members in May, that budget already included the proposed two-cent tax increase as a way to pay off debt service related to three upcoming and/or underway projects. They are:

• A new Senior Center in Alvin K. Bissell Park;

• A new citywide Preschool being constructed in Oak Ridge’s Scarboro community; and

• Other renovations related to Scarboro Park.

Watson also presented charts showing additional future debts the city of Oak Ridge is projected to owe — including those connected to renovations at the Oak Ridge High School.

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Oak Ridge City Council approved the issuance of $13.75 million in general obligation bonds last year to pay for both the Senior Center and Preschool, along with renovations to Scarboro Park — which is located next to the site of the future Preschool.

At the time, the city staff estimated all that work could lead to an 8-cent property tax rate increase, which so far hasn’t happened in full.

That being said, during Monday night's meeting, Council member Kelly Callison proposed raising the property tax rate two additional cents to $2.58, making it a four-cent rather than a two-cent hike. Callison proposed that, in this year's budget, the city of Oak Ridge spend the additional money on roads — which he said Oak Ridge citizens have requested “religiously.”

In the long term, Callison said the further increase would put the city in the “best possible financial position” for future payments and a planned new water treatment plant. Fellow Council member Jim Dodson initially seconded the motion, though he later said he was “somewhere in the middle” regarding whether he actually supported it.

After criticism from some other members of Council, however, Callison withdrew his motion to amend and it never came to a vote.

“I respect every one of your opinions,” Council member Callison said.

Among the critics of Callison's motion was Mayor Warren Gooch.

“I appreciate you bringing this to Council, but I clearly support the approach of an incremental tax increase,” the city of Oak Ridge’s mayor said.

Regarding future city debt payments — and at least indirectly Callison’s motion — fellow City Council member Chuck Hope said the city didn’t yet know what impact other items — such as new businesses (including those at Main Street Oak Ridge), new residential developments and sales related to the construction of the Uranium Processing Facility or UPF at the Y-12 National Security Complex would have on the city's tax revenue.

Stormwater, IT

Separate from the main budget, City Council also voted to spend remaining unspent but budgeted funds from Fiscal Year 2019 on information services, finance and stormwater issues.

Regarding stormwater, the city of Oak Ridge’s Finance Director Janice McGinnis said the city will “actively map” stormwater drainage and assets — and use an “improved citizen complaint tracking system” while also working on various improvement projects.

All of the City Council members voted in favor of these allocations except for Mayor Pro Tem Rick Chinn, who criticized the way in which city staff presented them to Council apart from the budget.

“I'm just flabbergasted,” he said.

“We should have known that going in.

“We had $300,000 left over from last year's budget we could have applied to (reducing) the property tax increase.

“We could have spent it on roads, Mr. Callison. We could have spent it on lots of things,” Chinn said.

“I think the goal was to keep the budget flat and once these projects go away, then we'll right size the budget. So we have low spending for the IT projects and stormwater that we would’ve had to raise the budget for years that we're trying to move money forward.” McGinnis said.

Chinn did call that a “smart way to move money around,” but repeated his point that Oak Ridge City Council should have known about these extra funds.

“It's our job, as a Council, to figure out how we move money around.”

Fellow Council member Ellen Smith pointed out, however, that all of the projects were multi-year.

“We're not changing the overall cost of the project. We are simply changing what year we spend that particular chunk of money,” Smith said.

Call Ben Pounds at (865) 220-5502 and follow him on Twitter @Bpoundsjournal.

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